Companies in the US added 196,000 workers in January, according to this morning’s report from the Labor Department. The gain beat expectations for a 172,000 increase, according to Econoday.com’s consensus forecast. The stronger print for the private sector isn’t really a surprise, considering the upbeat gain in the ADP Employment Report for January that was released earlier in the week. Today’s results reflect ongoing strength in the labor market, but the annual trend continues to signal that job growth, while still healthy, continues to decelerate.
Continue reading →

Momentum-based investing strategies may be one of the most reliable drivers of alpha, but like all sources of excess return this factor premium waxes and wanes through time. Accordingly, deciding when to exit the trade (or reduce exposure to it) is no less critical than determining when to jump on the gravy train.
Continue reading →

Analysts expect firmer job growth in today’s gov’t report for Dec: Reuters
GOP intel memo creates political firestorm in Washington: The Hill
US jobless claims fell to a low 230,000 last week: MarketWatch
US job cuts jump 38% in Jan vs. Dec but slip 2.8% in y-o-y change: CG&C
Severe winter weather pinches US car sales in January: USA Today
ISM Mfg Index for US slips in Jan but remains above 2017 avg: MarketWatch
US Mfg PMI in Jan signals strongest growth in three years: IHS Markit
US productivity ends 2017 with an unexpected decline in Q4: CFO
US workers rank health care as the country’s most critical issue: EBRI

Stocks in emerging markets blasted out of the gate for the start of 2018, once again posting the strongest monthly gain for the major asset classes. Overall, most markets advanced in January, with three exceptions: US real estate trusts (REITs), which suffered the biggest loss last month, along with modest declines in US investment-grade bonds and inflation-indexed Treasuries.
Continue reading →

Feud between Trump and FBI erupts into open battle: WaPo
White House seeks big cut in clean energy funding at Energy Dept: The Hill
Former Fed Chair Greenspan warns of bubbles in stocks and bonds: Bloomberg
Fed leaves rates unchange; expects higher inflation in 2018: Reuters
ADP: US private payrolls rose 234k in Dec, sharply above expectations: CNBC
Pending home sales rise 0.5%, the most since March: MarketWatch
Chicago PMI eased in Jan, pulling back from 9-year high: MarketWatch
US Employment Cost Index posts solid rise in 2017’s Q4: Reuters
2-year Treasury yield’s bull streak continues, rising to 2.14%, a new 10yr high:

Corporate payrolls increased by a robust 234,000 in January, according to this morning’s ADP Employment Report. The gain is slightly below December’s 242,000, although both numbers point to a solid rate of expansion in the labor market. Taking today’s update at face value points to a better-than-expected advance in Friday’s official employment report that’s due from the Labor Department. The mystery is why the government’s data to date has been trailing ADP’s estimates by a comparatively wide margin. Will the upcoming report from Washington close the gap? Or has the ADP data been overestimating the strength of the economy’s record on minting new jobs?
Continue reading →

Focus Economics, a consultancy that specializes in slicing, dicing and otherwise aggregating forecasts from various sources, rolled out its annual short list of “top blogs” in economics and finance for 2018 and The Capital Spectator made the grade. It’s a high honor, considering the prestigious roster of sites — 101 in all — that we’re rubbing shoulders with. Happy reading!

The question has gone viral lately, courtesy of the recent rise in interest rates. The benchmark 10-year Treasury yield, for instance, edged up to 2.73% yesterday, the highest in nearly four years. The 2-year rate’s ascent has been even stronger, rising to a 10-year high on Tuesday.
Continue reading →

Trump links presidency to US prosperity in State of the Union speech: Bloomberg
Five key takeaways in Trump’s State of the Union speech: The Hill
Fed on track to leave rates unchanged in Yellen’s last meeting as chair: Reuters
N. Korea expected to parade missiles ahead of Winter Olympics in S. Korea: CNN
Is Amazon’s entry into healthcare space a step to reordering industry? Bloomberg 
US Consumer Confidence Index rises in Dec, close to 18-year high: CNBC
Case-Shiller index: US home prices rise 6.2% in Nov vs year-ago level: USA Today
Should int’l investors show more respect (fear) for forex risk? The Economist
Trump’s approval by state — West Virginia leads, Vermont lags: Gallup

The benchmark 10-year rate yesterday (Jan. 30) jumped to 2.70% for the first time since 2014, based on daily data via Treasury.gov. One of the catalysts is firmer expectations for higher inflation. A weaker dollar is a factor too. Whatever the reason, the technical profile for the 10-year rate has recently shifted to an upside posture, signaling that the trend will continue.
Continue reading →